Thanks to rising medical costs many Nevada employers will see a small increase in the premiums they pay for workers’ compensation insurance this year, according to the Nevada Division of Insurance.
The average premium increase in the voluntary market will be about 1.1 percent, while Nevada employers who purchase their workers’ comp insurance in the assigned risk market will see an average increase of 2.5 percent, according to the division.
Both increases are set to take effect on March 1.
Nevada Insurance Commissioner Scott J. Kipper approved a filing from the National Council on Compensation Insurance for an average increase of 2.6 percent for Nevada workers’ compensation voluntary insurance loss costs. The average premium impact of 1.1 percent is smaller than the loss-cost change because of other changes to NCCI rating factors.
This is just the second time in five years that there has been an overall increase in voluntary loss costs, and the first time in as many years that there has been an overall increase in the rates for the assigned risk market, according to the division.
Data from the division shows that since 2008 there has been an approximate 21.7 percent decrease in voluntary-market loss costs, and a 22.6 percent decrease in assigned-risk-market rates.
“Our workers’ compensation market has been very stable,” said Gennady Stolyarov II, a property and casualty actuary at the division.
He said the vast majority of the voluntary increase is due to benefit changes due to medical fee schedule issued by the Department of Industrial Relations.
According to Stolyarov, 0.9 of the 1.1 percent hike is due to changes in medical fee schedule.
“The costs are expected to be on the rise,” he said. “This is normal medical inflation for the current conditions.”
Stolyarov said he believes Nevada’s market has been so stable because it privatized in 1995 from a monopolistic state-based system.
“We have a very competitive market,” he said. “That has provided options for coverage.”
The most significant rise in Nevada’s workers’ comp market was during the housing boom, which Stolyarov believes was a result of more people in a higher class employed in the state. Since then the state has seen mostly declines, he said.
This filing is from based on data from 2009 and 2010, after the recession started and during the continued lull in the housing market.